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Guiggey v. Great Northern
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 1997 ME 232
Docket: WCB-96-373
Argued: November 12, 1997
Decided: December 17, 1997
Panel: WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, LIPEZ, and SAUFLEY, JJ.
DANIEL GUIGGEY
v.
GREAT NORTHERN PAPER, INC.
RUDMAN, J.
[¶1] Daniel Guiggey appeals from a decision of the Workers'
Compensation Board concluding that his employer is not required to pay
him pre-decree interest pursuant to 39-A M.R.S.A. § 205(6) (Supp. 1997).
Because we agree with Guiggey that, pursuant to the plain language of
subsection 205(6), employees are entitled to pre-decree interest accruing
from the date that each payment would have been due if voluntarily and
timely paid, we vacate the decision of the Board.
[¶2] Guiggey suffered a work-related injury on March 12, 1994, while
employed by Great Northern. Great Northern contested liability, and
Guiggey petitioned for an award of benefits. The Board granted Guiggey's
petition and awarded him continuing total incapacity benefits retroactive to
the date of injury. Great Northern promptly paid Guiggey his past due
benefits in a lump sum without interest. Guiggey then filed a second
petition seeking interest at the rate of 10% per annum from the date that
each payment would have been due if timely paid, totalling approximately
$900. 39-A M.R.S.A. § 205(6). The Board denied Guiggey's petition for
interest, and we granted his petition for appellate review pursuant to 39-A
M.R.S.A. § 322 (Supp. 1997).
[¶3] Two provisions of the Act require an employer to pay interest to
an employee on an award of benefits: 39-A M.R.S.A. §§ 205(6) & (9)(F).
Subsection 205(6), at issue in this appeal, provides:
When weekly compensation is paid pursuant to an award,
interest on the compensation must be paid at the rate of 10%
per annum from the date each payment was due, until paid.
39-A M.R.S.A. § 205(6) (emphasis added). Subsection 205(9)(F), relating to
an employer's right to terminate unilaterally or to discontinue benefits,
provides:
If benefits have been discontinued or reduced pursuant to
paragraph A or B and the board, after hearing, determines that
benefits have been wrongfully withheld, the board shall order
payment of all benefits withheld together with interest at the
rate of 6% a year. The employer shall pay this amount within 10
days of the order.
39-A M.R.S.A. § 205(9)(F) (Supp. 1997).
[¶4] The parties agree that, because Great Northern contested its
initial liability for the injury and did not terminate benefits pursuant to
subsection (9)(A) or (9)(B), the applicable provision is subsection 205(6),
not 205(9)(F). The Board concluded, however, that because an employer is
liable for 6% interest pursuant to subsection (9)(F) for withholding benefits
after liability is established, interpreting subsection 205(6) as providing a
higher interest rate (10%) on pre-decree interest when an employer
disputes its initial liability in good faith would be incongruous. Accordingly,
the Board concluded that the phrase "the date each payment was due" in
39-A M.R.S.A. § 205(6) (emphasis added), is not triggered until there is a
Board decree ordering payment of benefits.
[¶5] We do not agree with the Board's interpretation of the plain
language of the statute. Pursuant to subsection 205(2), payment of workers'
compensation benefits may be "due" without a Board decree. See 39-A
M.R.S.A. § 205(2) (Supp. 1997) ("The first payment of compensation for
incapacity under section 212 or 213 is due and payable within 14 days after
the employer has notice or knowledge of the injury or death, on which date
all compensation then accrued must be paid") (emphasis added). Our
interpretation of the plain language is also supported by use of the past-
tense "was" to modify the word "due." Interest is required from the date
that each payment was due, i.e., prior to the decree awarding benefits.
[¶6] As we have stated, our interpretation of a statute is controlled by
the statute's plain meaning, unless that plain meaning leads to "absurd
results." See Folsom v. New England Tel. & Tel. Co., 606 A.2d 1035, 1042
(Me. 1992). Although the existence of different interest rates in subsection
205(6) and in subsection 205(9)(F) might appear illogical, we do not agree
that the result is incongruous or absurd. Moreover, it does not necessarily
follow, as Great Northern contends, that employers who, in good faith, fail to
accept initial liability for an injury will pay more than employers who
willfully violate the Act. Employers who willfully withhold benefits pursuant
to either subsection 205(1) or 205(9) are subject to a penalty pursuant to
39-A M.R.S.A. § 324 (Supp. 1997).
[¶7] Our reading of the plain language is entirely consistent with the
legislative history of section 205(6) and with long established policy
regarding prejudgment interest. Subsection 205(6) replaces former 39
M.R.S.A. § 72, which provided:
Upon each award of the Workers' Compensation Commission,
interest must be assessed from the date on which the petition is
filed at a rate of 8% per year, except that if the prevailing party
at any time requests and obtains a continuance for a period in
excess of 30 days interest will be suspended for the duration of
the continuance. From and after the date of the decree, interest
is allowed at the rate of 15% per year. Payment of any interest
allowed after the 10th day following the date of the decree is not
an element of loss for the purpose of establishing rates for
workers' compensation insurance. This section must be
enforced by the Workers' Compensation Commission.
39 M.R.S.A. § 72 (Supp. 1992), repealed and replaced by Maine Workers'
Compensation Act of 1992, P.L. 1991, ch. 885, §§ A-7, A-8. We have stated
that the assessment of prejudgment interest serves two purposes in the
ordinary civil context: first, it "compensate[s] an injured party for the
inability to use money rightfully belonging to that party between the date suit
is filed and the date judgment is entered," Osgood v. Osgood, 1997 ME 192,
¶10, 698 A.2d 1071, 1073-74; and second, it "'encourages the defendant to
conclude a pretrial settlement of clearly meritorious suits,'" Pierce v.
Central Maine Power Co., 622 A.2d 80, 85 (Me. 1993) (quoting Simpson v.
Hanover Ins. Co., 588 A.2d 1183, 1185 (Me. 1991)). Similarly, the
assessment of pre-decree interest serves two purposes in the workers'
compensation context: (1) to compensate the employee for delay in the
receipt of benefits; and (2) to discourage employers from contesting valid
workers' compensation claims.
[¶8] By virtue of the Board's interpretation, the employee, who is
often already financially strapped as a result of the injury, must not only wait
months, or potentially years, for the litigation of a claim, but also will receive
no recompense for the delay in payment. Moreover, aside from the legal
expense, it would cost nothing for an employer, pursuant to the Board's
interpretation, to contest a claim for compensation. Therefore, there would
be little disincentive for the employer to contest valid claims. Although we
have recognized that a purpose for the enactment of title 39-A was to reduce
costs in the workers' compensation system, Ray v. Carland Constr., Inc.,
1997 ME 206, ¶ 6, ___ A.2d ___, we have also recognized a legislative
purpose to encourage informal acceptance of claims in order to reduce
litigation, Mathieu v. Bath Iron Works, 667 A.2d 862, 865 (Me. 1995). The
Board's interpretation of subsection 205(6) runs directly counter to this
latter legislative policy and represents a significant departure from pre-
1993 law. We do not interpret the Workers' Compensation Act of 1992, P.L.
1991, ch. 885, as repealing or modifying the law prior to 1993 absent
express statutory language evincing that intent. Ray, 1997 ME 206, at ¶ 6;
Bureau v. Staffing Network, Inc., 678 A.2d 583, 588 (Me. 1996).
[¶9] Moreover, as we have stated, the 1992 workers' compensation
reforms were based in large part on the Michigan model. Bureau, 678 A.2d
at 589-90; Bowie v. Delta Airlines, Inc., 661 A.2d 1128, 1130-31 (Me.
1995); Report of Blue Ribbon Commission to Examine Alternatives to the
Workers' Compensation System and to Make Recommendations Concerning
Replacement of the Present System, Findings of the Majority of the Blue
Ribbon Commission 2 (August 31, 1992) ("The [Blue Ribbon] Commission
has developed a bill that adopts many of the key features of the Michigan
Workers Compensation system. A number of the Michigan provisions were
revised in order to reflect considerations particular to the state of Maine").
As Guiggey contends, section 205(6) is virtually identical to the correlative
statute in the Michigan Act:
When weekly compensation is paid pursuant to an award of a
worker's compensation magistrate, an arbitrator, the board, the
appellate commission, or a court, interest on the compensation
shall be paid at the rate of 10% per annum from the date each
payment was due, until paid.
Mich. Stat. Ann. § 418.801(6) (1997). As early as 1984, the Michigan
Supreme Court interpreted the Michigan statute to require the assessment
of pre-decree interest for each payment from the date that each payment
was due. Selk v. Detroit Plastic Prods., 348 N.W.2d 652, 653 (Mich. 1984).
[¶10] Although we accord deference to Board interpretations of the
Act, we are compelled to overturn Board decisions when the plain language
of the statute and its legislative history support a contrary result. Kinney v.
Great No. Paper, Inc., 679 A.2d 517, 518 (Me. 1996). Accordingly, we
conclude that, pursuant to subsection 205(6), employees are entitled to
interest in the rate of 10% per annum computed from the date that each
payment would have been due had the employer accepted liability and
voluntarily paid timely benefits.
The entry is:
Decision of the Workers' Compensation Board
vacated and remanded for further proceedings
consistent with the opinion herein.
Attorney for employee:
Wayne W. Whitney, Esq., (orally)
McTeague, Higbee, MacAdam, Case, Watson & Cohen
P O Box 5000
Topsham, ME 04086-5000
Attorney for employer:
John A. Woodcock, Jr., Esq., (orally)
Weatherbee, Woodcock, Burlock & Woodcock
P O Box 1127
Bangor, ME 04402-1127
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